A couple of years ago, I went to a talk by a professor of children's literature who was on the committee the year before.
It was very interesting to hear the criteria (and popularity isn't one). The judges have to read something like 500 books and some of them over and over again. There are so many good books on the table in those final rounds of deliberation ...
Personally, I have enjoyed the Newbery books. And so have my children, now that they are old enough to read some of them. They read a wide variety of books ... from fluff to deep ... and enjoy them all. But the meatier, heavier books stay with them. A year later, we're still talking about Kate diCamillo's books. The stories, themes, stay and grow with the children.
So, no, I don't think the Newbery has losts its way.
Vijaya